Transcript COLLEGE FINANCIAL AID MINI-LESSON INDIANA DEPARTMENT OF FINANCIAL INSTITUTIONS CONSUMER EDUCATION Copyright, 1996 © Dale Carnegie & Associates, Inc.

COLLEGE FINANCIAL AID
MINI-LESSON
INDIANA DEPARTMENT OF
FINANCIAL INSTITUTIONS
CONSUMER EDUCATION
Copyright, 1996 © Dale Carnegie & Associates, Inc.
INTRODUCTION
This mini-lesson includes learning objectives,
background information, discussion questions,
an activity, and sources of additional
information.
OBJECTIVES
Learners will:
• list and describe the types financial aid
• review the financial aid process
• identify the major sources of financial aid
HOW FINANCIAL AID CAN HELP
Financial aid helps meet the expenses of a college
education, including tuition, fees, books and
course materials, housing, food and
transportation. It is designed to supplement the
amount of money you have available to pay for
your college education.
More Facts
You should apply for financial aid if you have
calculated your total college expenses and
estimated the help you can receive from your
family and then determined that you will need
more money to pay for your educational
expenses. Even if you think that you are
probably not eligible for financial assistance,
you should apply! Many students are not aware
that junior colleges or vocational/trade schools
offer financial assistance to qualified students
as well.
Who Gets Financial Aid
Basically, financial aid is given on the basis of
need. Need is defined as the difference between
what it costs to attend a specific college and what
you can contribute to those expenses. If your
education will cost more than you are able to pay
then you have demonstrated financial need. This
also means that the amount of financial assistance
you receive will vary by the costs of the college
you select.
For Example
For example, tuition and expenses are usually
higher at a private college than at a state school.
If you commute to a college the costs are
considerable reduced. You could very possibly
afford to go to a higher priced private school if
you qualify for financial aid. With financial aid
you can select the best college for your major in
pursuit of the best possible education.
Types of Financial Aid
Three types of financial aid are available to
college students:
– Grants and Scholarships
– Loans
– Work-Study Programs
GRANTS & SCHOLARSHIPS
These are financial assistance awards that do not
have to be repaid and are available through many
different sources such as federal and state
governments, professional and service agencies,
private foundations and colleges. Grants are
bestowed on the basis of need, while
scholarships are based on either need and/or
outstanding achievements.
LOANS
Loans are financial aid available to both parents
and students. They are subsidized by either the
federal or state government, financial institutions
or the college and may have lower interest rates
than regular loans. Generally, you do not start
paying on these loans until after college
graduation. It is easier for students with no
established credit to qualify for student loans.
WORK-STUDY PROGRAMS
These programs allow the student to go to school
while earning money toward their education
costs. These jobs are usually 10 to 15 hours a
week on campus. Wages are based on federal
minimum wage guidelines. Work-study students
have to be enrolled at least half-time and show
progress in their studies.
FINANCIAL PACKAGE
Usually, financial aid is a combination of
different kinds of assistance and called a
"financial aid package." The financial aid
administrator at the college will put together your
financial aid package and tell you if you qualify
for special aid such as vocational rehabilitation.
Eligibility
A student's eligibility to receive financial aid is
calculated by a process call need analysis. The
information you provide on a FAFSA (Free
Application for Federal Student Aid) is analyzed
according to a formula designated by Congress.
This need analysis will determine how much
money a student and his family are expected to
pay for a college education based on where they
live and family circumstances. You can receive a
copy of the FAFSA by calling 1-800-4-FEDAID.
STUDENT FINANCIAL NEED
ANALYSIS PROCESS
Cost of Education MINUS expected Family
Contribution EQUALS Financial Need
Costs of
Expected
Financial
Education
Need
Family
Contribution
(EFC)
Includes costs of
tuition, fees,
room / board
books, supplies
transportation.
Based on the
financial resources
of a student and
his or her family.
Students can
receive up to
this amount of
need-based
financial aid.
Financial Need Amount
The financial need amount will be paid through
your financial aid package; a combination of
grants, scholarships or work/study program. If
there are any remaining financial need monies,
they will be considered for loans.
Federal Student Assistance
The federal government is the major source of
student assistance programs and requires:
U.S. citizenship or eligible non-citizen
if required, registered with Selective Service
application to a participating college
working toward a degree or certificate
making academic progress
have not defaulted on a Federal educational
loan
have financial need
Applying For Financial Aid
The process of applying for financial aid can be
complicated and time consuming. However, you
do not need to apply separately to each college
you are considering.
It is important to know what you have to do,
when you have to do it and how to do it right
the first time.
Step 1
Apply to all the colleges you have chosen. It is
especially important to consult these colleges for
the most up-to-date information about their
requirements and deadlines.
Step 2
At the same time, write to the financial aid office
of each college selected and request information
about the costs and financial aid. Some colleges
have their own financial aid applications.
Complete the information on all the required
forms and return it to the college by the deadline.
Step 3
Fill in the FAFSA application with your parent. The
information needed to determine your financial
need will come from the previous year's income
taxes. The FAFSA also asks for you to list up to six
schools that the U.S. Department of Education will
automatically send your application data. You can
give permission for your application data to be sent
to your state's financial aid program for consideration as well. Read the instructions carefully and
gather all your financial records before you start to
complete the forms. All the forms must be filled in
completely, accurately, and legibly.
Step 4
Mail the completed the FAFSA form to the
address on the form. There is no fee to have the
FAFSA processed. The Federal government is
responsible for all the costs of determining your
eligibility.
Step 5
Check with each college's student aid office to
verify that you have completed all the required
forms. Some colleges either prefer or require
specific forms, others accept any one of several
forms. Generally, you will only have to complete
the one need analysis form, but confirm with each
college that they do not also have their own separate
financial aid forms. Make sure you have all the
documents in by the deadlines.
Step 6
You may receive one or two supplements included
with the FAFSA. One could be a state supplement,
that will request financial information about you if
you want to be considered for scholarships or grants
from your state. The other form is a College
Questions Form to obtain additional financial
information if you want to be considered for nonfederal funds from your college. There can be a
small charge for processing either supplement.
Step 7
Within a month you will receive you SAR
(Student Aid Report). Carefully review the
document. If there are errors, you should make
the corrections on the special page provided and
mail it back to your processor. A revised SAR
will be mailed to you. The SAR will also give
you information about your eligibility for federal
student aid. Keep this document because you will
need to give it to your selected college in order to
receive federal aid. All the information on your
FAFSA is confidential, only the student aid
offices at the colleges you designate will have
access to the information.
Step 8
After the SAR, you will receive a Financial Aid
Award Statement from the college of your choice.
You should keep this statement for your records
or use it to reduce your aid or decline aid from
that college. If your application was chosen for
verification, read the verification information and
follow through with the instructions.
Step 9
You can expect the financial aid usually to be
credited to your account within two weeks of
the approval or completion of verification
process. Start a financial aid file to keep all the
records together and to make it easier to
reapply for financial aid in the future.
Federal Student Aid Information
Center
If you have questions about federal student
aid, you can call the Federal Student Aid
Information Center at 1-800-4-FED AID (1800-433-3243) between 9 a.m. and 8 p.m.,
Monday through Friday.
Information Center
The Information Center will:
• answer questions about the FAFSA form
• give information about colleges participation in
the federal student aid programs
• send federal student aid publications
• explain federal student aid requirements
• untangle the process of determining financial
need
SOURCES OF FINANCIAL AID
Federal programs supply the majority of
student aid available. You can apply for
financial aid from the following sources:
Federal Pell Grant
State Aid
SEOG
PLUS
Federal Perkins Loan
Ameri-Corps
Federal Subsidized Stafford Loan
Federal Work Study
Federal Pell Grant
A grant from $400 to $2,340 depending on need,
the costs of the selected college, length of the
program and whether the student is a full-time or
part-time student.
Fed Supplemental Educational
Opportunity Grant (SEOG)
A grant of $200 to $900 based on financial need.
It is called campus-based because the college
actually decides who will receive the grant
money.
Federal Perkins Loan
A campus-based loan with a low interest rate
through the college of up to $3,000/year with a
$15,000 undergraduate maximum and up to
$30,000 for graduate students. You must start to
repay the loan 9 months after graduation, leaving
school or dropping below half-time status.
Federal Subsidized Stafford Loan
A loan from a lending institution that is
guaranteed by the state or other private nonprofit
agency. The federal government pays the interest
on the loan while you are attending college. With
this loan, repayment begins six months after you
graduate, leave school or drop below half-time
status. The student is responsible for repaying this
loan.
Federal Unsubsidized Stafford Loan
A loan in which the amount varies based upon
dependent and independent status and is available
to all students. With this loan the interest accrues
and must be paid while you are still attending
school. You must be attending college at least
part-time and are not required to show need. The
student is responsible for repaying the loan.
Federal Parent Loan for
Undergraduate Students (PLUS)
A loan from a lending institution that can be
given to the parent or the undergraduate or
graduate student. The loan amounts are
determined by the costs remaining after
consideration of other financial aid, so you
could borrow the entire cost of education minus
financial aid. It is available regardless of income
but you will have to meet the lending
institution's requirements. The repayment begins
60 days after the disbursement.
Federal Work-Study
A campus-based program in which the employer
pays a small part of your earnings and the federal
government pays the rest. You can earn from
$2,000 to $2,600 based on the amount of your
financial need and must be enrolled at least halftime. Even though these jobs are usually
minimum wage, this income is not taxable so
there is no withholding. Most of the jobs are on
campus so there are minimal transportation costs
and they are flexible fitting around your class
schedule. Work-study promotes community
service and employment related to your major.
Ameri-Corps
A program that gives full-time educational
awards in return for community service. You can
provide the community service work before,
during or after your education. The award will
pay for current college expenses or can repay
federal student loans. To obtain more
information, call The Corporation for National
and Community Service at 1-800-942-2677.
STATE FINANCIAL AID
PROGRAMS
Every state has financial aid assistance for eligible
students who are legal residents. The eligibility
criteria will vary from state to state. Many states use
the FAFSA as the application for consideration of
aid that is either need-based or merit-based. To
obtain information about any state's financial aid
programs, you can write to that state's higher
education agency. Generally, state programs involve
competitive scholarship programs, grants, loans,
minority group and tuition equalization programs. It
is a good idea to apply as early as possible to
increase your chances since state funds are limited.
OTHER FINANCIAL AID
PROIGRAMS
If you do not qualify for need-based financial
assistance, consider grants and scholarships from
institutional programs, community programs,
foundations and business or corporate programs.
Scholarships
Scholarships are certainly worth the time and
effort required to apply. You can find directories
that give information about many different kinds
of scholarships at your local library. They are
awarded by colleges, states, the military,
businesses, corporations, unions, trade groups or
associations and can be:
More Facts
• nonrenewable scholarships or those that are
renewable each year
• scholarships for a particular attribute (academic,
sport or special abilities)
• national scholarships for any college
• scholarships for a specific college
• scholarships that are need-based
Explore Scholarships
Investigate foundations, religious organizations,
civic groups, fraternities or sororities and
patriotic or fraternal associations like American
Legion, YMCA, 4-H Club, Elks, Kiwanis,
Jaycees, Chamber of Commerce and Boy or Girl
Scouts. Also explore organizations associated
with your field of interest such as the American
Medical Association, Society of Automotive
Engineers or the American Bar Association.
Veterans' educational benefits are available if you
are an eligible dependent of a veteran.
Scholarships Internet Info
You can get fast and free scholarship information
on the Internet. A software program called
fastWeb, gives information about 200,000
scholarships, grants and loans available to both
undergraduate and graduate students. You
complete a student profile about your major, gradepoint average, special interests and ethnic origin.
The information is sent to your e-mail address
within 15 minutes and lists the financial aid
sources and their requirements. In the future they
will also send new financial aid listings that are
appropriate to your circumstances.
Scholarships & Family
Contribution
The scholarship awards do not reduce the family
contribution. This figure (family contribution)
has been established in the need analysis process
and it will always remain the same in any
financial aid package. A scholarship will not
reduce your family contribution amount, but it
will certainly help significantly to pay college
costs.
Need-Based Scholarships
A need-based scholarship can only be awarded
to a student who has shown financial need. If
the family contribution is equal to the costs of
attending college, then this type of scholarship
will not be awarded because no need is shown to
exist. Scholarships for a particular skill or
attribute are awarded regardless of a student's
financial need and will reduce the costs of
college by the amount of the award.
DISCUSSION QUESTIONS
1. Is financial aid only available to low income
students?
2. Will going to college part-time lessen the
chances of receiving financial aid?
3. Are there ways to reduce the cost of college?
4. What responsibilities are associated with student
loans?
5. Are your parents eligible for financial assistance
to help finance your college fees thru an affiliation with the military, employment, or union?
ACTIVITY
Using the "Checklist For Financial Aid Forms"
and the process for applying for financial aid,
create a calendar to identify all the deadlines and
requirements. Information is available in high
school counseling offices or college admissions
offices, including the important deadline dates for
the federal and state governments and private
sources of funds.